The Power of Organizational Culture

National culture plays a big role in shaping how organizations work. People from different countries have different values, behaviors, and ways of working. This means that companies operating in multiple countries must understand and respect cultural differences to succeed (Hofstede, 1980).

Leadership has a big impact on how a company’s culture develops and stays strong. The way leaders communicate, make decisions, and set company values shapes the overall work environment. McGregor’s Theory X and Theory Y (1960) explain two different leadership styles and how they influence workplace culture. Theory Y leaders promote teamwork and creativity, while Theory X leaders tend to run their companies with strict rules and control.

How a company manages its employees has a big impact on its culture and success. There are two main ways of handling Human Resource Management (HRM): Hard HRM and Soft HRM. Hard HRM treats employees like a resource that needs to be controlled for maximum efficiency, while Soft HRM sees employees as important assets whose happiness and involvement help the company succeed (Legge, 1995). These approaches affect workplace culture, employee motivation, job satisfaction, and overall business performance.

Organization culture plays a key role in the way employees make decisions including the way they think and act. The main drive behind this is the leadership approach. This will have a huge impact on business performance, which will determine whether a company thrives or struggles. Edgar Schein (1985) explains organizational culture as a three-layered structure consisting of Artefacts, Espoused Values and Underlying Assumptions. This article will use real-world examples of Google and Enron’s company culture to explore the role of organizational culture in business success and failure. Schein’s Model of Organizational Culture will be used as the framework for this analysis.